On March 31, 2025, the cryptocurrency industry welcomed a major news story. According to Fortune magazine's report, the issuer of the US dollar stablecoin USDC, Circle, is actively advancing its IPO plans. Circle has now engaged JPMorgan Chase and Citigroup as underwriters and is expected to formally submit its initial public offering documents by the end of April, with a target valuation set between $4 billion and $5 billion. This has once again shifted the market's focus to the recent hot stablecoin race.

Circle IPO Making a Comeback

Interestingly, this is not Circle's first IPO attempt. Back in 2018, Circle had already shown interest in the public market. At that time, Circle gained prominence by acquiring the cryptocurrency exchange Poloniex and launching USDC. In the same year, Circle announced a $110 million funding round led by Bitmain, with continued participation from existing investors such as IDG Capital and Breyer Capital, valuing the company at $3 billion. This funding round may have signaled Circle's preparation for a future IPO, but the harsh bear market in the crypto sector and a 75% valuation drop for Circle in early 2019 delayed the IPO plans.

What truly brought Circle closer to the public market was the 2021 SPAC (Special Purpose Acquisition Company) deal. In July 2021, Circle announced a merger with the SPAC Concord Acquisition Corp. However, Circle soon encountered regulatory challenges. The U.S. SEC increased scrutiny on SPAC transactions, demanding stricter financial disclosures and compliance measures. In December 2022, Circle's deal with Concord fell through due to a lack of SEC approval, and the company publicly stated the "termination of the SPAC plan." Over the next three years, Circle focused on enhancing USDC's compliance and market penetration, such as partnering with Visa to expand payment scenarios and applying for regulatory licenses globally.

Related Read: "Retrospect on Circle: Funding with Bitcoin's Story, Listing with Stablecoin's Story"

To understand Circle's IPO plans, one must mention its partner Coinbase's successful experience. On April 14, 2021, Coinbase went public on Nasdaq, becoming the first major cryptocurrency exchange to be publicly listed in the U.S. The opening price rose from $250 to $328.28, with an intraday high of $429, reaching a market capitalization of $64.5 billion. Coinbase CEO Brian Armstrong has expressed the hope that USDC will become the "world's largest stablecoin." If Circle's IPO is successful, it will not only inject funds and resources into this goal but may also further solidify the strategic alliance between the two companies.

The relationship between Coinbase and Circle is more than just a regular partnership. In 2018, the two companies jointly launched USDC. As Circle's core product, the issuance and management of USDC rely heavily on Coinbase's support, and Coinbase also vigorously promotes USDC through its platform. By 2025, the market capitalization of USDC has exceeded 600 billion U.S. dollars, making it the second largest stablecoin behind only Tether (USDT). Coinbase not only supports Circle in terms of technology and marketing but also holds a stake in Circle, adding more highlights to Circle's IPO.

Further reading: "A Conversation with Circle's Founder: Reflections on Circle's Turbulent Ten Years"

Circle vs. Tether: Formidable Rivals in the Stablecoin Race

In the stablecoin market, Circle's USDC and Tether's USDT see each other as the top competitors. With a market capitalization of around 140 billion U.S. dollars, USDT firmly holds the top spot, while USDC follows closely behind at 60 billion U.S. dollars. Although there is still a gap between the two in terms of market share, Circle is gradually narrowing the distance to Tether by leveraging its compliance and transparency.

Since its launch in 2014, Tether has dominated the stablecoin market due to its first-mover advantage and wide range of use cases. However, Tether's rise has not been without controversy. The transparency of its reserve assets has always been a focus of concern for regulators and investors. Despite Tether's claim that its USDT is fully backed 1:1 by the U.S. dollar or equivalent assets, the lack of multiple audit reports and doubts about its reserves have subjected it to criticism.

In contrast, Circle has taken the lead in compliance. Each USDC token is backed by audited U.S. dollar reserves, and Circle regularly publishes audit reports issued by top accounting firms. This transparency has not only won favor from traditional financial institutions but also made it a "star pupil" in the eyes of regulators. For example, Circle has obtained money transmission licenses in multiple U.S. states and chosen France as its headquarters in Europe, expanding its global footprint. In 2024, Circle also obtained regulatory approval in Japan to launch USDC, further enhancing its international influence.

Related reading: "WSJ: The Life and Death Struggle of Tether and Circle"

The profit logic of stablecoins is not complicated. Taking Tether as an example, users exchange dollars for USDT, and Tether invests these funds in low-risk assets such as U.S. Treasury bonds, money market funds, earning the interest rate differential while maintaining the 1:1 peg to the dollar. During the high-interest rate period from 2022 to 2024, the U.S. Treasury bond yield once exceeded 5%, bringing generous returns to Tether. Additionally, Tether increases its revenue by charging withdrawal fees and sharing profits with partners. Tether achieved a profit of up to $13 billion in the full year of 2024, a figure that even exceeded the annual revenue of the world's largest asset management company, BlackRock. This business model has almost no costs but can continuously generate cash flow, making it a "money printer of the digital age."

Circle's USDC adopts a similar profit model, but due to its smaller market size, its revenue naturally falls short of Tether. However, Circle's transparency and compliance have won it more institutional customers. For example, Visa and Mastercard have integrated USDC into their payment networks, and BlackRock also indirectly supports USDC applications through its BUIDL Fund. If Circle's IPO can successfully raise billions of dollars, it may accelerate its expansion in the institutional market, narrowing the revenue gap with Tether.

Stablecoin Legislation Propels Forward

Circle's decision to push forward with an IPO this year is inseparable from the improvement of the external environment. Since Trump's election, he has publicly supported cryptocurrency development multiple times, pledging to make the United States a "global cryptocurrency center" and emphasizing the dominant position of the dollar in the digital economy. As a key vehicle for the digitalization of the dollar, stablecoins have naturally become a policy focus.

As of April 1, 2025, the legislative process in the United States regarding stablecoins has been accelerating, with the "GENIUS Act" and "STABLE Act" attracting attention. The "GENIUS Act," proposed in 2024, requires stablecoin issuers to have 100% of their reserve assets backed by cash or cash equivalents and undergo regular audits. It was passed by the Senate Banking Committee on March 13 this year with 18 votes in favor and 6 against, and is set to enter a full Senate vote. Bo Hines, Executive Director of the President's Digital Assets Advisory Committee, expects it to be submitted to Trump for signing by June at the earliest. At the same time, the "STABLE Act" is steadily progressing in the House of Representatives, with a markup revision scheduled for April 2. Currently, both chambers are coordinating the details of the bill, with explicit support from the Trump administration, pledging swift signature into law once passed. This development provides a policy tailwind for compliant stablecoin companies like Circle, marking a clearer regulatory framework for the U.S. in the digital dollar field.

Related Reading: "Why Did the Crypto Market Lose $900 Billion While Stablecoin Market Cap Hit a New High?"

In addition, the EU's "MiCA" regulation will be fully implemented in 2024, imposing higher transparency and capital requirements on stablecoin issuers. Circle has taken the lead in establishing its European headquarters in France, demonstrating its commitment to global compliance. Countries like Japan and the UK are also accelerating the development of stablecoin regulatory policies, providing clearer guidance for industry growth.

The enactment of stablecoin regulations may have a profound impact on the market landscape. For Circle, the success of its IPO could not only provide financial support but also potentially drive greater adoption of USDC in compliant markets. On the other hand, Tether faces increased regulatory pressure, requiring adjustments to its reserve structure, including the potential sale of some non-cash assets. It is foreseeable that as the regulatory environment clarifies and institutional funds enter the scene, the stablecoin market may undergo a new round of reshuffling, with Circle's IPO serving as a significant catalyst in this process.

Cryptocurrency IPO Process Heating Up

Against the backdrop of increasingly clear stablecoin regulations, Circle's IPO plan may just be a glimpse of traditional capital entering the crypto market. The policy tailwinds have not only paved the way for stablecoin issuers like Circle but also opened the door to Wall Street for more crypto companies. Bitwise predicted at the end of last year that there could be 5 companies (including Circle) going public by 2025:

· Circle: Issuer of the second-largest stablecoin, USDC.

· Figure: Known for its blockchain-based financial services such as mortgage loans, personal loans, and asset tokenization, the company has been exploring going public since last year.

· Kraken: The IPO plans of this US-based cryptocurrency exchange date back to 2021.

· Anchorage Digital: Its status as a federally chartered bank may pave the way for its listing.

· Chainalysis: A leader in blockchain compliance and intelligence services, is poised for an IPO.

Furthermore, Hadick of Dragonfly stated, "I expect the LP (Limited Partner) market to get better; they would want to put more funds into crypto. Many traditional Web2 crossover funds will come back to the Web3 space. We have seen such trends in some areas, such as stablecoins and payments." He added that venture capital transactions often lag behind public market price increases by a quarter or two.

Related Reading: "Forbes: Cryptocurrency Will Be Redefined by 2025"

Circle's IPO may also serve as a milestone for the stablecoin industry's development. With the gradual clarification of the global regulatory environment, stablecoins are entering a golden age of compliance and institutionalization. Can Circle take advantage of this opportunity to further challenge Tether's dominant position? The answer will be revealed in the market performance after the IPO.

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